We can tell that this coin is neither 2.5 nor 2.6 cm (that is, neither 25 nor 26 mm), but is instead in between those two measurements.

While we can't really tell that it is 2.54cm, we do know it is neither 2.5 cm nor 2.6 cm. Thus if we said:
          The coin is 2.55 cm ± 0.05cm
That would say the same thing as saying it lies between 2.5 and 2.6 cm.

In this case, the margin of error, or the precision, is 0.05 cm.

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